Yeeda Pastoral Company - Case Update

The Supreme Court of Western Australia has granted leave to the administrators of Yeeda Pastoral Company to transfer all shares in the company to TLP4 Australian Holdings, a fund backed by the Canadian government, despite arguments by one of the company’s shareholders that the shares had residual value and that the transfer would unfairly prejudice the shareholder.

In July of last year, Richard Tucker, Anthony Miskiewicz and David Osborne of KordaMentha, the administrators of Yeeda Pastoral Company and certain of its subsidiaries, recommended a DOCA proposed by TLP4. The DOCA allowed continuity for the companies, their businesses and retained employees through a share transfer to the purchaser for consideration including $38.5 million plus approximately $755 per cattle.

The takeover was approved by creditors, and subsequently also received the approval of the Foreign Investment Review Board, the Pastoral Lands Board and the ACCC. The administrators then sought approval from the Court to transfer the company’s shares to TLP4.

Fitzroy River LLC, one of Yeeda’s shareholders, opposed, taking the position that there was residual value in the equity of Yeeda and that it would be unfairly prejudiced by the transfer. In February of this year, the Court decided that it was unable to determine the issue on the evidence before it, finding that there was no admissible evidence as to the value of Yeeda's pastoral leases.

The administrators submitted further evidence and the Court approved the transfer. The Court determined that the valuation methodology—primarily based on productive unit rates per adult equivalent head of cattle—was sound and sufficiently supported by comparable sales. Similarly, the Court found the valuation evidence credible and admissible.

Ultimately, the Court concluded that Yeeda’s assets (pastoral leases and abattoir) were insufficient to cover its liabilities, with a shortfall of at least $66 million. Accordingly, the shares had no residual value, and there was no reasonable prospect they would gain value within 9 to 12 months. Fitzroy and the other shareholders were therefore not unfairly prejudiced by the DOCA, which represented the best path forward for Yeeda's business and creditors.

Read the decision HERE.

Professionals involved: 

• Paul Edgar SC & Stefan Tomasich of Quayside Chambers (instructed by Lavan) for the administrators, Richard Tucker, Anthony Miskiewicz and David Osborne of KordaMentha

• Justin Hewitt SC of Eight Selborne and George Pasas of Clayton Utz for TLP4 Australian Holdings

• Fairweather Litigation for Fitzroy